MC 24: A Vulgar Solution to the Water Diamond Paradox

2026 marks the 250th anniversary of The Wealth of Nations and Adam Smith’s water-diamond paradox. Considered among the most foundational puzzles in economics, no theory of value can pass into history without offering up a solution. Smith described the paradox as follows: “ Nothing is more useful than water: but it will purchase scarcely anything; scarcely anything can be had in exchange for it. A…